2 days ago
Government vows to stimulate growth of auto component sector
Tau outlined various efforts under way to support the industry, such as reforms to the Automotive Production Development Programme Phase 2 (APDP2) regulations.
'Some of these reforms include incentive structure, shifting duty credits to reward manufacturing, instead of assembly credits.
'Our critical minerals and metals strategy will prioritise benficiating platinum group metals, copper and manganese for high-value new energy vehicle components like fuel cells and batteries,' he said.
Stronger incentives to produce NEV models locally are also set to take effect.
'The Taxation Laws Amendment Act, gazetted on December 24 2024, introduces a 150% capital allowance, for qualifying investments in EV and hydrogen vehicle production. It covers assets such as buildings, plants and equipment brought into use between March 1 2026 and March 2036.'
On the EV manufacturing skills development front, Tau confirmed that new curricula and certification programmes are being developed with the Tshwane University of Technology, the Cape Peninsula University of Technology and Unisa, which will culminate in a pilot project involving 100 students next year.
'We have walked a long journey with the automotive sector on transformation, inclusion drives growth, the SAAM 2035's target of 130 new black-owned manufacturers, is advancing.'
Tau said the government was working to eliminate compliance burdens and reduce red tape which inhibits investments into the sector.
'Our policy response is accelerating our plan to introduce a general laws amendment bill which looks to fast-track high-impact investments and projects within 90 days.'
He said a study through the International Trade Administration Commission (ITAC) would explore the effect of imports into South Africa and the impact on local production.
'We want to grow the sector — so our first option must not be to wield the stick, but rather offer the carrot to companies, to attract more investment into the country, increasing the value-add of our component manufacturers.'
